It is very necessary to build a fund portfolio in a planned way. To build an effective fund portfolio, we should consider three core elements: relevance, volatility and profitability.
One fund fluctuates greatly under the influence of some factors, but has little influence on another fund. When the two funds are added together, the volatility is averaged and weakened. The lower the correlation, the better the effect of diversification. We can test the correlation from different fund types, different asset investment directions, different fund companies and different fund managers.
For example, I choose the stock fund of fund company A, the bond fund of fund company B and the monetary fund of fund company C. This combination can effectively reduce the risk of short-term fluctuations, but at the same time it will also reduce the total value of long-term returns, and risks and returns will always be biased and trade-offs.
Building a portfolio is to treat the portfolio as a whole, and the portfolio is not static. It needs to be adjusted in time according to market conditions, including the adjustment of positions and the replacement of funds. Before the adjustment, we must consider when there is a suitable replacement object, and the whole portfolio can reach a balanced state after the adjustment is completed. The construction of fund portfolio is not to eat buffet and choose whatever you see, but to pay attention to balanced collocation, so as to be well-fed and nutritious.
Generally speaking, a combination of 4- 7 funds is more appropriate. There is a certain adjustment space and it is not complicated to manage.
There are many fund portfolios in the market now, which is to help you match a fund portfolio through professional management, as long as you use it to buy and sell.